6 steps for optimizing the IC supply chain

Preparing the IC supply chain for a market upturn

Puneet Saxena, i2 Technologies
EETimes (08/11/2009 12:17 PM EDT)

With cautious optimism gradually building in the air, semiconductor companies are wondering what they need to do to prepare for the upturn. Growth, as we all know, is ultimately driven by customers. Simply put, customer experience is the most vital ingredient that fuels a company's growth.
So what does it take to deliver superior customer experience? These include the ability to anticipate customers' needs in advance, the ability to keep promises and the flexibility to accommodate changing customer needs, rapidly.

Clearly, this is easier said than done. Look a little deeper and you will find that truly successful semiconductor companies excel at leveraging their supply chains in delivering superior customer experience.

At the very core, successful companies have invested efforts in mastering the fundamental building blocks of supply chain management: effective demand and supply management.

Following the economic slowdown in late 2008, an i2 Technologies-led analysis of 42 small-to-midsize fabless semiconductor companies revealed an interesting insight. In reaction to the downturn, some companies slammed the brakes too hard; others simply couldn't slow down fast enough.

Unable to comprehend changes in demand or transmit changes rapidly across the subcontracted supply chain, half of these companies saw a dramatic shift in their normalized inventory profiles.

As a result, these companies are either struggling with large amounts of capital tied in investments—not to mention higher risk of obsolescence—or are desperately scrambling to keep pace with customer orders, losing the opportunity to gain share.

Here are six suggestions for semiconductor companies that are looking to improve their demand and supply management processes during the current market downturn:

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